Trending Gold Demand

There has been a steady growth in the gold demand in the first half of 2016 and it is expected to grow in the second half as well. Continued growth of 15 percent in Q2 2016 brought total H1 gold demand to 2,335t. In fact, the gold price posted the strongest H1 performance, increasing by 25%, for more than about 35 years.

The major rise in the investment demand of 1,063.9t was 16% higher than the previous demand from 2009. Investment was the largest component which marked a major increase in gold demand for two consecutive quarters (Q1 and Q2) – the first time this has ever happened.

The total supply of gold has increased by 10% year-on-year in Q2, to 1,144.6t vs. 1,041.7t in Q2 2015. First half supply is just 1% higher, the slowest rate of H1 growth for 8 years. The main contributors to this trending gold demand have been hedging and recycling, both of which have been supported by higher gold prices

When World Gold Council (WGC) released its data, Gold’s reputation as the ultimate rush-to-safety asset was more highlighted.

The London-based financial and economic experts announced that investment demand for the yellow metal intensified to 1,064 tones between January and June, up 16% from the previous first-half high printed in 2009 when the global economy lurched into recession.

Investor demand has risen by 127% higher year in the first half of 2016, and carried a value of $41.6bn. This bubbling interest of investors drove total gold demand during the half to some 2,235 tones, the second highest amount ever recorded till now.

Central banks have been very much in focus during the first six months, the WGC noted, with expectations of delayed interest rate hikes in the US — combined with negative interest rate policies in Europe and Japan — driving demand for the so-called hard currency.

And the WGC cautioned that gold’s eye-watering ascent could be running out of steam after the breakneck first half.

There has been no evidences recently which can prove that the trending gold demand will come to a halt, although there are many evidences of making profit through this yellow metal. Market experts have however suggested a positive shift in the attitudes among Western investor and demand must be built keeping all these factors in mind.

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